You're opening a coffee shop. Let's see how many lattes you need to sell to stay afloat.

Your Fixed Costs (Monthly)

Rent: £2,000

Staff (part-time): £2,800

Insurance: £180

Utilities (gas, electric, water): £420

Internet and POS system: £100

Total: £5,500 per month

You pay this whether you sell 0 coffees or 10,000.

Your Variable Costs (Per Latte)

Coffee beans: £0.45

Milk: £0.35

Cup, lid, sleeve: £0.25

Napkins, stirrer, sugar: £0.10

Card processing fee (3%): £0.11

Waste (spills, training): £0.24

Total: £1.50 per latte

Your Price

Selling price: £3.50 per latte

Running the Calculation

Contribution per latte: £3.50 - £1.50 = £2.00

(That's how much each sale contributes toward your fixed costs)

Break-even point: £5,500 ÷ £2.00 = 2,750 lattes per month

What That Means in Reality

Per day: 2,750 ÷ 30 days = 92 lattes/day

Per hour: 92 ÷ 8 hours open = 11.5 lattes/hour

That's one latte every 5 minutes, all day, every day, just to break even.

The Brutal Truth

Before 2,750 lattes: You're losing money. Every latte sold brings you £2 closer to breaking even, but you're still in the red overall.

Latte #2,751: Your first profitable latte of the month.

Can You Hit That Target?

Let's reality-check this:

Busy hours (7-9am, 12-2pm): 20 lattes/hour × 4 hours = 80 lattes

Moderate hours (9-12pm, 2-5pm): 8 lattes/hour × 6 hours = 48 lattes

Slow hours (5-7pm): 3 lattes/hour × 2 hours = 6 lattes

Total per day: 134 lattes

134 lattes/day × 30 days = 4,020 lattes/month

You'd break even at 2,750 and have 1,270 profitable lattes:

1,270 × £2 contribution = £2,540 profit

But this assumes:

• No sick days
• No slow weeks
• Perfect execution
• No unexpected costs
• You're open every day

Improving Your Break-Even

Option 1: Raise Price to £4.00

• New contribution: £2.50
• New break-even: 2,200 lattes (733/day)
• Extra profit on 4,020 lattes: £4,050

Option 2: Cut Rent to £1,500

• New fixed costs: £5,000
• New break-even: 2,500 lattes (83/day)
• Extra profit: £540/month

Option 3: Add Food (Higher Margin)

• Pastries at £3.50 (£1 cost)
• Contribution: £2.50
• Sell 30/day = 900/month
• Reduces coffee break-even by 450 lattes

The Lesson

Break-even is just the starting line. You want to be 30-40% PAST break-even to have a sustainable business with a buffer for bad months.

Use the calculator to model different prices and cost scenarios.